Yukon companies question government contract with N.W.T. firm

Some Yukon contractors are asking why the territorial government awarded a contract worth nearly a million dollars to an N.W.T. company in a non-competitive process.

The contract is for services related to construction of the new Francophone high school and community centre in Whitehorse — specifically, to act as the "owner's representative," to oversee the design and construction of the building.

The contract for those services had originally been awarded through a public competitive bid to Kobayashi and Zedda Architects (KZA) of Whitehorse. The firm had bid a price of $198,606 for the work.

KZA co-owner Tony Zedda told CBC News that the government then changed the scope of work, prompting KZA and the government to negotiate a new price. However, Zedda says both parties ultimately agreed to end the contract.

Then in April, the Yukon government hired Taylor Architecture Group of Yellowknife to do the work for $904,086 through a standing offer agreement — not a competitive bidding process.

"Not sure what happened there. I had thought that the limit for sole-sourcing under a standing offer agreement was in the range of $250,000," Zedda said. 

"So when we heard all of this information, we were a bit shocked by, a.) the amount, and b.) by the process by which that consultant was retained."

Zedda also wonders why the work went to an N.W.T. company instead of a Yukon firm.

"I'm not sure who thought that there weren't capable local design firms and engineering firms that probably would have loved to have the opportunity to bid on that work as well," he said.

Complaint to Contractors' Association

The Yukon Contractors' Association — of which KZA is not a member — says it received a complaint from a member of the association. The complaint was about the contract and the fact that it was sole-sourced to a non-Yukon firm.

"Within the past few weeks, we did get a complaint and we have had a meeting with the government," said YCA president Terry Sherman.

He says Yukon Chamber of Commerce president Peter Turner also attended that meeting, and that another is planned.

​Construction of the school is scheduled to begin next spring, with an anticipated completion date of November 2020. The Yukon government has allotted $20 million for the project, with another $7 million expected from the federal government.

In an interview with CBC, a spokesperson for Yukon's Department of Public Works, Doris Wurfbaum, could not answer questions about the scope of the contract given to Taylor Architecture Group, nor could she say who signed off on the standing offer agreement.

Wurfbaum could also not explain why the contract was substantially higher than the initial $198,000 contract awarded to KZA, but she said the work was sole-sourced so that there wouldn't be any delays in the project.

'A good business decision'

Wurfbaum also said choosing a non-Yukon firm was a decision that will actually help Yukon companies.

"Choosing a Yukon company would have put that company not in a position to be able to bid on the bigger construction project," she said, referring to the design/build contract that is currently out for public tender and closes next month.

When asked why contractors couldn't decide for themselves what to bid on, Wurfbaum replied that "this was a good business decision."

"It's good for the contracting community, it's good for us, it's good for KZA, and it's good for TAG [Taylor Architecture Group]," she said.

During the 2016 election campaign, Premier Sandy Silver promised that a Liberal government would ensure Yukon companies received preferential treatment when it came to government contracts for capital projects, goods and services. 

His mandate letter to Public Works Minister Richard Mostyn directed the minister to "increase the ability of local businesses and First Nations to secure government tenders."